Can I sell my house with tenants in it?

The simple answer is, Yes. You can sell a property with a tenant still living in it. Perhaps you received an opportunity to take advantage of the property appreciation value, or maybe you are tired of being a landlord, despite your reasons there are solutions. However, there are a few things you may need to know about selling tenant-occupied homes.

Some Challenges Faced with Selling A Tenant-Occupied Home

Like every sale transaction, there are challenges to consider. Unfortunately, seller-occupied homes are not exempted. Here are some of the possible issues you may face:

• Your target market may be considerably smaller
• Marketing and showings for home sale would be harder
• Receiving tenant cooperation during sale
• Lack of control on property condition

Smaller Target Market

Traditional home buyers may not be interested in purchasing a tenant occupied home. They may not want to deal with the lease process or having to wait for the tenant to vacate the property. Most times this kind of sale may be attractive to investors who are interested in acquiring buy and hold properties. Nonetheless, there would be a smaller pool of buyers available.

Difficult Showings

It can be harder to schedule the necessary showings, inspections, appraisals, and more with tenants living in the property. You must take into consideration, the challenge of providing multiple advance notices and requests, particularly if there is not a good tenant- landlord relationship. Most buyers would like to view the property and not solely rely on the property information provided. Therefore, this can further reduce your target market/ potential buyers. COVID restrictions could also make showings difficult as well. 

Tenant Cooperation

Tenants rarely are eager to help property owners market their homes. Realtors are also reluctant to show homes that have a tenant in place because of the potential headaches associated with an uncooperative tenant. The owner would need to find a solution to deal with these factors for the benefit of the sale. It is possible that the tenant may immediately start looking for options on moving since this may be an inconvenience. The tenant would constantly need to allow strangers to visit their “home” at all hours of the day. They may also have concerns about the potential new owner such as possible rent increase and new lease changes and/or policies. 

Harder to Control Property Condition

Most of the tenant occupied properties would be sold AS-IS. Generally, staged homes would tend to sell faster and for higher amounts than those which are not. Tenant-occupied homes can challenge this industry norm because the property’s condition will be largely out of your control during the selling process. The tenant would have control of the cleanliness of the home and the owner would have very little options for adding upgrades for added value. Additionally, owners may not be aware of possible issues not disclosed by the tenant that may affect the property selling potential. 

In summary, it is entirely possible to sell a home with tenants in place — though it can present some challenges. Property owners will need to coordinate with tenants to successfully market the property to a smaller pool of buyers. Perhaps the property owner can present a few incentives to the tenant and brief them on the sale process and ownership handover.